There are Businesses and Then There are Businesses

Fall 2016

I read in the Philadelphia Inquirer about three Wharton grads who developed a new app, “Beer Me”.  They intend to change the way that people order at bars. According to Beer Me’s calculations, using the App cuts the average payment time from 90 seconds to 20 seconds. A 20-percent tip is included, and then the alcohol is delivered.

It reminds me of “Back to School”, a Rodney Dangerfield movie about an untamed father that accompanies his bookish son to college.  Rodney and his entourage are in the bar, and he instructs the barmaid to: “Bring us a pitcher of beer every seven minutes until somebody passes out. And then bring one every ten minutes.”

It strikes me as a shame that some bright young people’s talent is not more productively applied.  It is a free country though, and people are able to choose their own careers. The Beer Me guys could have the last laugh, and become internet millionaires.

Nancy and I recently were in Milwaukee, looking for another place in Wisconsin to visit. We noticed that Kohler (think toilets) was nearby.  There was a 5-star hotel there, and the company offered a 3-hour factory tour. I have an engineering degree and love to see how things are made.

Kohler is a company town with a population of approximately 2,500.  The town consists of two hotels, a small shopping center, schools, parks, single family houses, and Kohler factories.

We checked into the American Club and had dinner at Cucina, a Kohler owned restaurant in the Kohler owned shopping center. The American Club Hotel is a showcase for Kohler bath products. The night before our tour, I was looking forward to bathing. Our room was equipped with a huge bathtub, with a filler the size of a diesel truck exhaust pipe. When I tried to shut off the water, the handle broke with the water still on full stream. I immediately opened the drain and called reception.  When I said that I needed a plumber, and that the faucet had broken, the person started to laugh. A few minutes later, the plumber showed up, and quickly shut off the water. He said that he could complete the repairs then, or return the next morning. I said to fix it then, thinking that they had an entire factory of parts nearby. In about 20 minutes, he returned, repaired the valve, and we were good to go.

The next morning, we reported to the Kohler design center at 8 a.m. for our tour.  Our guide was a 42-year Kohler veteran, having worked in the factory for 30 years, then leading tours for 12 years.

We started in the Urinal Department.  Basically they form the urinals from clay, let them dry, bake them, and then coat them with a ceramic glaze and re-bake them.  Nancy has worked with pottery, so the processes were familiar to her.  The engineering challenges were evident; how to handle heavy breakable ceramic items, sometimes very hot, while maintaining quality and cost control.

Next, we went to the Faucets and Fittings Factory. There were many computer controlled lathes, drills, routers and planes.  Shavings of brass and aluminum were everywhere.

Our tour then headed to the foundry, which is a giant Machiavellian- like furnace for melting scrap steel. The fiery hot molten metal is poured into molds to form tubs, or other items.  Our guide said that Herr Kohler came from Germany in the 1870’s and set up a foundry to make cast-iron cattle troughs. At some point, he coated one of the red hot cast iron tubs with powdered glass, which melted to a smooth, shiny, impervious surface, and the ceramic tub was born.

These factory jobs are real work.  I noticed that the employees were United Auto Workers Union members, so I assume that these are good paying jobs.  Our guide told us that part of their compensation is based upon output and quality, computed for every individual.  Sounds complicated but fair, and only possible with computers. There are 30,000 employees, with plants around the world, including China.

My understanding is that the Kohler family are billionaires. Seeing the tremendous infrastructure and Investment, if they can still make a profit, they deserve it.

On further thought, Beer (the champagne of the working man) and toilets are both pretty important, so maybe a little more respect is due to the app developers.

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TABASFUNDING has provided a six-figure line of credit for remodeling rental properties to Hawthorne Investments LLC. Hawthorne is an affiliate of Ranieri and Kearns Associates, a multi-faceted residential and commercial construction company.

TABASFUNDING provides entrepreneurs with funding to acquire or expand businesses in the form of flexible loans from $100,000 to $750,000, or more. We supplement bank and other funds, and consider most types of businesses in Pennsylvania, New Jersey, and Delaware.   Please call for further information.

 

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